Is my friend lying about his $33 Facebook fb shares?
I've been in a hot debate with a buddy of mine and I wanted to get some additional knowledge before I slap him in the face.
So today was a big day with facebook being released. I'm sure we all watched the prices skip between $38 (IPO price) and $42.
My buddy says he got in at $33. I immediately called BS. I'm going to copy and paste his response:
"I got a call from my broker at 12:30 that the buy order was approved at $33."
I said BS.
He responds "Large firms bought the stocks in high volumes a lot lower than 38. 38 is what they are trading at to the public. My dads broker gave me 100 and my dad 900 shares at $33 and some change."
Now here is what I know..It IS possible for a firm/bank/investor to have made deals with FaceBook prior to them going public..where by when one day, FB goes public, the "firm" gets x amount of shares at $33 in exchange for a very large amount of cash today.
IF that were the case, what my friend is saying is NOT correct. On top of that, I don't care if my brother is asking for shares, I'm not selling them for less than $38.
I still don't want to call BS if it IS possible for him to have these shares at $33. So I ask you knowledgable people - What are realistic ways my friend could have bought shares at $33..
I think you should slap your friend in the face.
I think the stock is worth about $3.00 a share, and that's only because of the demand. People who like babbling on the site want to own the company. So I wouldn't be mad at your friend if I were you, I would feel sorry for him and his dad for buying from all the insiders dumping their shares today.
I would say your friend is lying. A lot of friends on Facebook updated their status to read that they bought so many odd shares. Just about all of them wouldn't even know how to open a brokerage account. Everyone wants to be involved and be part of Facebook, hipsters if you ask me.
$33 a share seems slap worthy. From what I read a lot of brokers did not even have it available when the buyers wanted it. Not only that but there was a lot of confusion whether or not buy and sell orders even got through for several hours. I don't think your friends dad got in line ahead of all the big wigs who just could not go without owning some Facebook.
We ended up going back and forth and he couldn't explain it. Finally I reached the conclusion that his dad most likely paid market price and then gave 100 of his 1000 shares to his son at a discount.
I texted him today that even at his great deal, the stock is below $33 now. He responded that it will be between $300 and $400 a share in a few years.